Reorder point
The reorder point is the inventory level at which a SKU should be reordered to avoid running out before the next delivery arrives. It is calculated as (average daily sales × lead time in days) + safety stock, so replenishment is triggered with enough buffer to cover demand throughout the supplier lead time.
How it's calculated
Work out the demand you expect during the supplier lead time, then add a safety-stock buffer for variability. Replenishment fires the moment on-hand stock falls to that level.
Reorder point = (average daily sales × lead time in days) + safety stock
Example: 20 units/day × 10-day lead time + 32 safety stock = 232. Reorder when on-hand hits 232 units.
Why it matters
The reorder point answers "when do I place the next order?" so replenishment fires automatically before you stock out. Set it too low and you lose sales to empty shelves; too high and cash sits in excess inventory. For a Shopify store with dozens of SKUs and varying lead times, per-SKU reorder points are the backbone of hands-off purchasing.
Track this automatically
Logistified calculates and monitors metrics like this across your whole Shopify catalog and turns them into reorder alerts and purchase orders.